Fixed Tax Regime for Retailers and Specific Sectors

In order to achieve economic stability and revenue maximization as well as for simplification of revenue laws for the taxpayers, certain amendments/insertions/additions have been made in Sales Tax Act, 1990 (hereinafter referred to as “STA”), Federal Excise Act, 2005 (hereinafter referred to as “FEA”) and Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (hereinafter referred as `ICTO”) through the Finance Act, 2022. Following amendments are made in Fixed Tax Regime for Retailers and Specific Sectors

The fixed tax regime for the retailers has been rationalized and now instead of percentage of the amount of monthly electricity bill, tax shall be charged on their monthly electricity bills as; Rs. 3000 for monthly bill upto Rs. 30,000, Rs. 5,000 if the monthly bill exceeds Rs. 30,000 but does not exceed Rs. 50,000 and Rs. 10,000 for monthly bill over Rs. 50,000. This shall constitute full and final discharge of tax liability of such persons under both Income Tax Ordinance, 2001, and STA.

However, these tax amounts shall be doubled if the name of the retailer is not appearing on the Active Taxpayers List (ATL) issued by the Board under section 181A of the Income Tax Ordinance, 2001 on the date of issuance of monthly electricity bill.

In addition to the above, the Board has been empowered to notify through an STGO persons or class of persons required to discharge their sales tax liability through payment of a fixed amount along with their monthly electricity bills.

For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/

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